The Valley Virginian. [volume] (Staunton, Va.) 1865-1895, 1887-02-24
The Situation.

III INC LeSioidtut6 ASSEM- pleO. 1Uero has |
never been any question as to the validity
of the bonds issued at the time the debt |
was incurred, nor as to the legitimacy Of |
the purpose to which they were appro-
priated.
The representatives of the people, or
those delegated to represent them, passed
the funding bill of 1S70-7l, in which $780,
eco 600 of the $4,000, 900, principal and
interest, owed by the old State. were as
s;lmed by the present Virginia. The bonds
Il D. issued TO represent this amount were
a sached to them tax-receivable
fesi coupons, but after about sol ,000,
~ I'D been funded under the provisions
q tie act Of 1901, a new Legislature
repealed the act, and passed law forbid
ding the receipt Of these coupons in pay
ment of taxes. This prohibitory law was
taken to the courts and pronounced un-
constitutional, as it violated the contract
contained in the bonds and coupons issued
under The funding act. Under this de-
cision, coupons were received for all taxes
due to The State. and their inflow to the
Treasury was so rapid and ruinous that
they absorbed the revenues dedicated by
the constitution to the public schools,
causing deficiency in that fund of 81. $780,
00O The operation of this legislation had
disastrous effect upon all the interests of
the Common wealth. The people became
alarmed and in the election of 1879 chose
Legislature favorable to REIMBURSEMENT
Of he debt. The McCulloch bill was the
result. 1t proved failure, inasmuch as it
retained the taX-receivable coupon and
the non taxable feature of the bonds, and
proposed other offensive provisions to which
the people would not submit. The next
Legislature framed the Riddleberger bill,
in which the statement of the true debt
of Virginia was given at about SIS. 000, 900
less than in the former measures. This
bill did not provide for tax receivable cou-
pons nor release the bonds from taxation,
and stipulated for only 3 per cent. inter-
est, whereas the bill of 1871 provided for
6 per cent, and that of 1879 for per cent.
the Object of the legislation of 1SS2-the
Riddleberger bill and its auxiliary en-
forcing measures-was two fold. First
| 20 state the real debt, as it was believed
to exist; and to force the creditors to fund
the bonds issued under the acts of 1871
and 1879, the first bearing six per cent.
and the last four per cent. interest, into
The bonds provided for under the act of
! 1882. bearing three per cent. interest To
| do this it was necessary to cripple the
practical use of the coupons in paying
taxes. without violating The contract they
represented. Coupon Killers Nos. and 2
were enacted for this purpose-not to pro-
hibit their r C; ption-but to embarrass
their Inflow into the Treasury so as to
make it more economical for the bond
holder to fund in tie per cent. bonds
than it would be to submit to the vexa
Iious litigation in the State courts to
comply with the conditions Of This legis
lation, as an indispensable precedent to
their reception for taxes. Although the
purpose and effect of these coupon killers
was to fatally impair the coupon in its ca
paci!y is tax paying agent, the supreme
Court of the United States sustained its
validity, inasmuch as it did not deny the
tax paying character of the coupon, and
consequently did not violate the contract
it represented. 1t was held that as the
State provided remedy for the creditor.
in the use of the coupon for raging taxes,
III had the right to prescribe the mode by
which that remedy could be enforced. The
result of this legislation was to arrest the
inf 0w of coupons into the treasury; to
| to furnish the means to give the public
schools their constitutional fund to pro-
vide for the charitable institutions and
the current expenses of the government,
and leave a surplus in the Treasury
There was but little interest paid upon the
funded debt duringthe operation of thisleg-
islltion, except as it was converted into
| Riddleberger bonds, and this was done to
very limited extent, as the creditors
| would not accept its conditions. Conse-
quently d large amount of past due inter-
est has accumulated, which constitutes a
debt that is as binding as the funded, or
any other debt the State owes.
In 3-s4, the Legislature, which the
Democrats had secured, with the ostensi
BILE purpose of giving more force to the
previous legislation, but practically to
destroy it, enacted that coupons should
not be received for certain taxes, and
nothing but gold, silver, national bank
notes or greenbacks should be. This
opened the way for the creditors to assert |
their rights. They appealed to the courts.
The claim was that the legislation OF |
1888 81 denied all remedy to the creditor, |
repudiated the coupon, and consequently |
violated the contract which it represented, |
and therefore was unconstitutional. In |
various forms the issue involved twas ia
ken before the courts, and in every case
the judgment has been that the coupon
must be received for all taxes, dues and |
demands owed 10 the State. Not only
that they must be received, but that when
rendered and refused, it was payment of
the tax, and that levy for the taxes thus
discharged would be trespass for which
the officer so offending could be proceeded
against by the tax payer for damages.
That is The situation to-day. The sa-
lient features of it are that the bonds
issued under the bills of 1871 and 1879, with
tax-receivable coupons attached, consti-
tute contract, which the State is power
less to violate, and that the coupons are
receivable for taxes, and to refuse them
must be at the cost OF the State. and not
the PARTY who tenders them. These two
essential and absorbing facts, are backed
by the decisions Of the Supreme Court OF
the United States, as well as the State and
Federal constitutions. They are abso-
lutely invunerable, and it is like biting
file to assail or attempt to circumvent
them as the case now stands. All legisla-
ton by the State designed for that pur.
pose must necessarily be pronounced null
and void, and of no effect. The conditions
upon which the creditors rest their case.
are those prescribed by the State. through
the General Assembly delegated to repre-
sent the people, and sanctioned and
ciinched by the adjudication of the high
est appellate tribunal of the land. All at